Americans stocking up on holiday cooking essentials may be greeted with an unwelcome surprise in the grocery aisles: higher prices for eggs, spurred by an intensifying bird flu outbreak.
Food inflation has cooled significantly from its pandemic peaks in 2022. But consumers are still grappling with persistently high prices. The frustration is particularly acute when it comes to grocery staples, so much so that food costs took center stage in this year’s presidential election.
Many voters, who are not yet feeling much relief from cooling inflation, blamed the Biden administration for the sticker shock, even though much of the surge in food prices was tied to the coronavirus pandemic and other global events over which the White House has little control.
President-elect Donald J. Trump made lowering grocery prices a key part of his campaign, though in an interview with Time magazine after his victory, he conceded that bringing prices down would be “hard.” Mr. Trump’s proposed tariffs on imports from China, Mexico and Canada have also stoked concern about an uptick in prices for a host of products.
Egg prices, which have fluctuated this year, are perhaps one of the most tangible barometers of food costs for consumers. They climbed 8.2 percent in November, according to data from the Bureau of Labor Statistics, helping to drive an acceleration in overall food inflation. A dozen grade-A eggs cost $3.65 on average, up from $2.52 at the start of the year and above the roughly $2 average when the pandemic hit the United States in the spring of 2020.
In recent weeks, the bird flu outbreak has wiped out flocks of egg-laying hens, causing wholesale prices to surge just as many Americans are planning holiday recipes that call for more eggs, like cookies, eggnog and latkes.
“You have shocks to supply and increase to demand,” said David Ortega, a food economist at Michigan State University. “That’s a recipe for prices to go up — in this case quite significantly.”
As of Thursday, the average wholesale price for a dozen eggs in the United States was up more than 150 percent from a year ago and more than 18 percent higher than just the previous week, according to commodities data from Trading Economics.
American farmers have slaughtered tens of millions of egg-laying hens since the bird flu began to spread nearly three years ago, and the outbreak has picked up steam in certain parts of the country this month.
In Iowa, the top state for egg production, the state’s Agriculture Department has detected multiple outbreaks in December, including in a flock of more than four million hens. In California, Gov. Gavin Newsom declared a state of emergency this week over the outbreak, which has upended the state’s dairy industry and dented its egg supply, leaving some shelves mostly bare. At some stores, customers have been restricted from buying more than one carton at a time.
With wholesale prices at their highest levels this year, the short-term outlook for retail prices “isn’t looking very good,” Dr. Ortega said, adding that it can take about four months to rebuild flocks that have been decimated by the flu and have them start producing eggs again.
David Anderson, a professor of agricultural economics at Texas A&M University, said he “wouldn’t be surprised for us to hit new record prices in terms of retail prices.”
“The pressure is really there for higher prices,” he added.
Some analysts have argued that consolidation among egg producers has also contributed to periodic surges in wholesale price in recent years. Farm Action, a group that fights corporate monopolies in food and agriculture, said in a report in September that the country’s largest egg producers overstated the effect of bird flu outbreaks on egg production in 2022.
“The true driver of record egg prices was simple profiteering and, more fundamentally, the anti-competitive market structures that enabled the largest egg producers in the country to engage in such profiteering with impunity,” Farm Action wrote in its report.
Egg production is a “complex system,” said Amy Hagerman, an associate professor of agricultural economics at Oklahoma State University. The bird flu outbreak “creates added volatility into that supply chain,” she said, “which makes it very difficult to break apart how much of the price increase is associated with true cost increase in the supply chain.”
Grocery inflation — and egg prices, specifically — also took the spotlight this year in the context of Kroger’s attempt to acquire rival Albertsons, a deal that federal and state judges blocked this month. In the Federal Trade Commission’s lawsuit challenging the merger, a Kroger executive made waves when he testified in August that the company had raised prices of milk and eggs more than the costs it had incurred from inflation. (Kroger, at the time, said this evidence did not reflect the chain’s business model to lower prices for consumers.)
Debates over supermarkets’ pricing strategies could continue as their suppliers raise costs.
“That may be a competition thing,” Dr. Anderson said. “If their competition down the street doesn’t raise prices, maybe they can’t, either.”
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